Success and failure in international regimes

Submitted by Andrea Liverani
On Tue, 01/19/2010

To be effective, multilateral regimes need to get three things right. They first have to ensure levels of participation adequate to solving the problem at hand. They then need to require adequate action from all parties. And finally have to encourage, or enforce, compliance.

Participation. Action. Compliance. Achieving only two of these three objectives is not enough.

Without adequate participation, encouraging action and compliance is meaningless. Consider a non-proliferation treaty where even one of the proliferators is left out: this would lead at best to non- compliance and at worst to a collapse of the regime itself.

Similarly, without compliance, achieving adequate participation and requiring action would lead to underachieving on the objectives, and alienate complying parties: a fisheries regime where the quotas are constantly overshot would lead to a collapse of fish stocks and of trust between parties.

And without adequate action, compliance and participation become meaningless. If the prescribed reduction in total warheads is not sufficient to reduce the dangers of proliferation, then whether or not parties comply does not matter. Equally, there is no point in agreeing to fishing quotas whose limits are largely beyond what is required necessary to preserve the stocks.

There is a vast literature on the drivers of success and failure in international regimes. Its main conclusion is that regimes dealing with the international management of common resources usually fail to achieve the three objectives above. Reasons include the pervasiveness of free-rider problems hampering compliance; the prevalence of prisoner-dilemmas scenarios limiting both participation and compliance; and the tendency to fix modest, inadequate targets as a way to entice countries to participate (in an ultimately ineffective endeavor). Also, there is the likelihood that attempts at enforcing collective action will result in Catch 22 situations, where credible enforcement requires ‘big’ sticks, but the bigger the stick the higher the incentives to defect.

Together with issues such as fisheries’ depletion, nuclear proliferation and the ozone layer, the management of climate change faces the same challenges of global collective action problems. Indeed, the current climate regime, whose main components are the Kyoto protocol and the Framework Convention, failed on all three objectives above. By leaving out a key player like the US, the regime fell short of ensuring sufficient participation. Some (Annex I) parties failed to comply and overshot their quotas. And not all parties were asked to take appropriate action. Annex II parties were ‘in’ without having anything specifically to accomplish; while Russia and other transition economies were enjoying hot air. More importantly, even if all countries had respected their engagement, Kyoto would have done little to halt the rapid growth in global emissions.

Sure, stressing failure betrays a partial viewpoint. Despite all its limits, the current climate regime set the stage for future efforts to address climate change. This was no small feat. Kyoto and the UNFCCC allowed countries to experiment with capping and trading emissions for the first time. They established the principle of long term goals through short term targets. They generated an incredible architecture of monitoring and reporting arrangements, in which countries could assess their own performance and compare it to the others’. And it allowed for the ‘common’ exploration of the problem, notably through the IPCC.

In this light, the current climate regime emerges as a limited, and certainly overly cautious, first step, rather than a complete failure. That regime-building takes long should not necessarily be viewed as defeat, but as part of the process – the evolution of the trade regime has been going on for centuries. With climate change, of course, time is limited. Every time WTO members resume talks they are likely to find the situation more or less as they left it. With climate change, procrastination implies reducing the space for action and the options available.

Any solution to a problem that is perceived as intractable involves a quest for simplicity. As a recent Economistarticle [1]entitled “Planet B” concluded, breaking down the climate regime in more treatable, digestible chunks provides a way forward in this direction.

Four main areas lend themselves to this. The first involves reducing the complexity of the interactions amongst parties. The proliferation of ‘restricted’ forums addressing the climate problem (G8, G20, Major Economies Process, etc), and increasing evidence that climate talks are getting increasingly bilateral, hints that this strategy is well underway.

The second is to break down the problem by type of emissions. Currently the Kyoto protocol establishes legally binding commitments for the reduction of four GHGs, and two groups of gases. Sourcing the regulation of certain gases out of Kyoto might help. Ideas for regulating HFCs within the Montreal Protocol or a different “legally distinct agreement” go in this direction.

A third line of action involves separating the issues at stake. Adaptation funding is clearly linked to mitigation action, as is the financing of international R&D. But it does not follow that they should be necessarily treated under the same treaty, particularly if this complicates the achievement of an overall deal. Instead, a system of interwoven treaties might work better.

The fourth area involves disentangling the sources of emissions. For instance, sectoral agreements could support sector-wide emissions reductions (steel, transport, etc), by setting common standards or promoting appropriate policy and actions, as argued in chapter 5 of the World Bank’s World Development Report 2010: Development and Climate Change[2].